Was ‘Clunkers” too successful or just poorly planned

Published 12:00 am Friday, July 31, 2009


“Cash for Clunkers,” the $1 billion taxpayer-funded infusion for the new car industry is out of cash after four days.

If you calculate $4,500 per vehicle (although some vehicles only qualified for $3,500), you come up with 222,222 vehicles — and the program was so popular that Transportation Secretary Ray LaHood announced Thursday that it was being pulled “because it was out of money.”

However, if you checked the website, (http://www.cars.gov/) it was still active Friday morning, but terribly inadequate in information.

For example, a pull-down list of participating dealers in Louisiana listed 11 communities. There was New Roads, but no New Orleans. In fact, four of the state’s largest cities — New Orleans, Alexandria, Lake Charles and Monroe were not listed as having participating dealerships.

An ABC News story said the website dealers must use to access the program is pretty much a clunker with repeated crashes causing a backlog of more than 25,000 deals submitted to the government for approval.

Based on reports, there was enough money available for 13 deals per participating dealership … and some dealerships submitted as many as 250 deals!

I’d be willing to bet that any dealer in America would tell you they’d love to have another 13 sales, but that they wouldn’t make a difference in the doors staying open or not.

So, has “Cash for Clunkers” been too successful or is it just another example of this administration’s shooting from the hip without aiming at the target?

After all, in the the Wall Street bailout it was never even considered to put restraints on the use of taxpayer money to continue to pay huge bonuses or hold executive retreats.

We were told (by both the outgoing Bush administration and the incoming Obama administration) that if we did “infuse” General Motors and Chrysler with huge amounts of money, they would go bankrupt.

Guess what? We “infused” — more than once — and they went bankrupt!

Chrysler is now part of Fiat and you and I own 60 percent of Government Motors — oops, GM — and what happened to the “infusion”?

“Clunkers” might have worked better with more restrictions. As an example, I could have traded my 2004 Jeep Wrangler Unlimited with 75,000 miles (18 mpg highway) in for a pickup that got 20 mpg and gotten $4,500! Not a lot of “greening” there.

And while “Clunkers” pushed new vehicle sales, it did nothing for used cars. Instead, it actually took some “good” vehicles off the market because participating dealerships were required to destroy the engine and drivetrain. And just because one vehicle got three miles per gallon better mileage than another doesn’t mean one is a gas guzzling clunker.

You have to wonder … did anybody in Washington ever think how many new vehicle sales we might have been talking about?

Nah, that’s too easy!

(John H. Walker is editor and publisher of L’Observateur and can be reached at (985) 652-9545 or john.walker@wickcommunications.com.)